Trade

Gar Alperovitz | May 15, 2017

Why are current approaches to trade problematic?

Current trade policies, largely driven by major corporations, have resulted in great economic and social pain. They have also disrupted many local communities, thereby undermining one of the key requirements of the Pluralist Commonwealth: stable economic foundations upon which to nurture the social, economic and ecological conditions of COMMUNITY. Further, structured as they currently are (and as illustrated in the North American Free Trade Agreement [NAFTA], the Trans-Pacific Partnership [TTP] and other approaches) current trade policies commonly establish so-called “Investor-State Dispute Settlement” (ISDS) provisions that give foreign corporations the ability to sue governments over regulations or even macroeconomic policies that undermine their expected profits, investments, or property rights.1  This gives corporations the power to challenge local, state, and national efforts to secure important economic, health, safety, worker’s rights, and ecological restrictions on unbridled corporate economic strategies. For example, ISDS provisions in NAFTA have allowed TransCanada to sue the United States for $15 billion dollars for rejecting the Keystone XL pipeline.2

How would the Pluralist Commonwealth approach trade?

The Pluralist Commonwealth rejects such efforts. It understands the management of trade to be an important element of any serious approach to democratic PLANNING. Moreover, viewed in perspective (as John Maynard Keynes pointed out long ago)—planned trade can be an aid to full employment, reducing pressures either to block trade unnecessarily or to slow the economy to deal with balance of payments problems.3 Trade planning begins with the requirement that imports not be allowed to disrupt local employment and community stability until and unless alternative employment and means of economic stability have been fully established by a combination of public and private action and planning.

Additional policies include retraining and upgrading of skills—undertaken not in the abstract, but in conjunction with specific jobs and democratized industries that planning decisions schedule as replacements for those lost to trade. (Similar planning is at the heart of military conversion, and necessary to helping move the economy and its communities away from excessive concentration on military weaponry, towards greater development of domestic industry.)

A further priority of trade policy and planning entails support of developing nations. To the extent domestic jobs and communities are fully supported by planning, imports from such nations can be more easily welcomed. Reforming intellectual property regimes to ensure that the biodiversity cultivated by indigenous people and communities for generations is not captured by corporate interests can bolster such approaches.4

Taken together such Pluralist Commonwealth policies dissolve the linkage between an exploitative trade system and the drives of a domestic economy founded on continual GROWTH. To the degree planning can help achieve stable jobs and stable communities, the need for expansionist trade in support of export-led growth can be radically reduced. So, too, such efforts undercut the political-economic pressures that have regularly led to geopolitical, economic, and military policies in support of undemocratic regimes willing to accept U.S. corporate export and investment priorities (see AMERICA).

What existing efforts point toward a sustainable and just trade regime?

Equal Exchange suggests some of the directions new trade regimes might also incorporate. Formed in 1986 and established as a worker cooperative in the 1990s, Equal Exchange partners with small farmers and cooperatives around the world to sell fair trade coffee, tea, chocolate, and other imports. For Equal Exchange, fair trade means “[m]ore equitably distributing the economic gains, opportunities and risks associated with the production and sale of these goods” in addition to raising incomes, supporting worker cooperatives, promoting labor rights and safe work environments, and helping to provide credit for producers in the Global South.  5

On a larger scale, the Sierra Club has recently put forward a comprehensive proposal for a trade system that would incorporate, rather than undermine, sensible planning efforts regarding climate change.6

See also:

AMERICA, COMMUNITY, GROWTH, PLANNING

Further reading

John Cavanagh and Jerry Mander, eds., Alternatives to Economic Globalization: A Better World is Possible (San Francisco, CA: Berrett-Koehler, 2004).

Thad Williamson, et al., Making a Place for Community: Local Democracy in a Global Era (New York, NY: Routledge, 2002).


Principles of a Pluralist Commonwealth

Endnotes   [ + ]

1. The investment chapter of the TPP agreement made public by Wikileaks defines investment to include “the expectation of gain or profit.” For information on  ISDS, see: Todd Tucker, “The TPP has a provision many will love to hate: ISDS. What is it, and why does it matter?” The Washington Post, October 6, 2015, accessed November 11, 2016; and Jonathan Weisman, “Trans-Pacific Partnership Seen as Door for Foreign Suits Against U.S.,” New York Times, March 25, 2015, accessed November 11, 2016.
2. Todd Tucker, “TransCanada is suing the U.S. over Obama’s rejection of the Keystone XL pipeline. The U.S. might lose,” The Washington Post, January 8, 2016, accessed November 11, 2016.
3. Joseph Cammarosano, A Wider View of John Maynard Keynes: Beyond the General Theory of Employment (Lanham, MD: Lexington Books, 2016), xxvi.
4. John Cavanagh and Jerry Mander, eds., Alternatives to Economic Globalization: A Better World is Possible (San Francisco, CA: Berrett-Koehler, 2004), 222-225.
5.   “Fair Trade,” Equal Exchange, accessed November 11, 2016  
6. Sierra Club, “Discussion Paper: A New, Climate-Friendly Approach to Trade,” Sierra Club, accessed February 25, 2017.

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Gar Alperovitz | May 15, 2017